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McKinsey Predicts Big Industry Tech Shift By 2025

May 18, 2015

A new report by McKinsey & Company predicts that by 2025 the fourth industrial age will be in full swing. What's interesting is that unlike earlier industrial leaps, it won't require a huge investment in new equipment to make the next great transition. 

McKinsey & Company is predicting in a new report, that by 2025 the fourth industrial age will be in full swing. What's interesting is that unlike earlier industrial leaps, it won't require a huge investment in new equipment to make the next great transition. That's because increasingly cheap and intelligent sensors will help feed data to factory managers to drive efficiencies.

First there was steam, which really changed everything because instead of humans doing all the work, we could have machines doing a lot of the heavy lifting. Next, we introduced electricity and that pushed things forward dramatically, but also drove pollution and energy usage. In the third age, we introduced automation and robotics with humans working alongside robots to build things like cars. 

I saw an example of this when I toured the Volkswagen factory in Wolfsburg, Germany last summer. Humans worked together with robot arms, which took care of the truly tedious parts of car building like putting the same screw in the same place hundreds of times. Today's robots excel at repetitive tasks.

Which brings us to what many have been calling Industry 4.0. In the next great industrial leap forward, we are going to see the use of sensors and digitization driving a new form of efficiency inside of factories.

It's impossible to consider the Industrial Internet of Things without thinking about its cousin Big Data. The two work together and are inextricably linked. The sensors are giving off tons of data about the health of the machines, how much activity they are putting out and how much effort and wear and tear that's having. Over time, that data will become increasingly detailed and sophisticated. 

Big Data, even more than the Industrial Internet of Things itself, has the power to squeeze greater efficiencies out of industry. 

As McKinsey put it, "Traditional productivity levers have been widely exhausted, and industry players are looking for new opportunities to boost productivity. Leaders across industries are leveraging data and advanced analytics to achieve a step change in value creation."

If that's true, industry needs to enter this fourth industrial age as soon as possible as most factories have reached their peak efficiencies from gains in the third age. 

It's important to remember that the Internet of Things is only one part of this transition, which according to McKinsey includes augmented reality, smart glasses, 3D printing and more. 

Each of these technologies, and probably some we haven't considered yet, will in their own way begin to transform industry and how work gets done. Robotics will continue to change the nature of work, but these devices will also help humans better understand the problems in the systems and force them to rethink how we organize ourselves in industry, and come up with a new set of problems and solutions to drive these greater efficiencies.

Regardless of how this plays out, it's clear that IIoT will play a key role as we move into the next industrial era and you need to be ready.

Ron Miller is a freelance technology journalist, blogger, enterprise reporter at TechCrunch and Contributing Editor at EContent Magazine. He has been writing about technology since 1988 when he began working as a technical writer. Past gigs include FierceContentManagement, CITEworld, Computerworld, TechTarget and many others. He co-founded socmedianews.com (originally socmedia101.com) in 2009 and contributes regularly to its content. You can learn more by visiting his blog, by Ron Miller at http://byronmiller.typepad.com.